Industrial Logistics Properties Trust(US:ILPT)2022-04-26 22:09Property Portfolio and Occupancy - As of March 31, 2022, the company owned 412 consolidated properties with approximately 59.7 million rentable square feet, achieving an occupancy rate of 98.9%[94][97]. - The company’s total rentable square feet increased from 34,870 in 2021 to 59,736 in 2022, reflecting a significant expansion in property portfolio[97]. - As of March 31, 2022, approximately 3.3% of total leased square feet and 3.6% of total annualized rental revenues were from leases set to expire by December 31, 2022[107]. - The weighted average remaining lease term for consolidated properties was approximately 8.6 years as of March 31, 2022[94][108]. Rental Income and Financial Performance - For the three months ended March 31, 2022, rental income increased to $71,375, a 31.6% increase from $54,217 in the same period in 2021[126]. - Net operating income for the three months ended March 31, 2022, was $55,167, reflecting a 31.4% increase compared to $41,994 in the prior year[126]. - The company recorded a net loss attributable to common shareholders of $6,514 for the three months ended March 31, 2022, compared to a net income of $19,337 in the prior year, representing a 133.7% decrease[126]. - Net loss for the 2022 period was $(9,787) compared to a net income of $19,337 for the 2021 period, indicating a significant decline in profitability[142]. - Funds from operations (FFO) attributable to common shareholders for the three months ended March 31, 2022, was $8,102, down from $30,670 in 2021, indicating a decrease of approximately 73.6%[144]. - Normalized FFO attributable to common shareholders for the three months ended March 31, 2022, was $27,603, compared to $30,670 in 2021, reflecting a decline of about 10.5%[144]. Acquisition and Joint Ventures - The company completed the acquisition of MNR, acquiring 124 Class A properties for a total consideration of $3,734,485, which included the assumption of $323,432 in existing mortgage debt[95]. - Following the MNR acquisition, a joint venture was formed, with the company retaining a 61% equity interest and the investor acquiring 39% for $587,440[96]. - The company completed the acquisition of MNR on February 25, 2022, for a total consideration of $3,734,485, including the assumption of $323,432 in existing mortgage debt[119]. - Following the MNR acquisition, a joint venture was established for 95 properties, with an institutional investor acquiring a 39% equity interest for $587,440[121]. Tenant and Revenue Sources - The company reported that Federal Express Corporation accounted for 18.9% of rental income for the three months ended March 31, 2022, with other significant tenants including Amazon.com subsidiaries[112]. - As of March 31, 2022, Mainland Properties accounted for approximately 72.7% of the company's annualized rental revenues[113]. - Hawaii Properties represented approximately 27.3% of annualized rental revenues as of March 31, 2022, with $26,336 scheduled to reset in rental revenues through 2027[114][117]. Debt and Financing - The company had $275,075 in cash on hand as of March 31, 2022, with 77.3% of annualized rental revenues derived from investment-grade rated tenants[145]. - The company’s principal debt obligations included a $1,385,158 outstanding principal amount of the Bridge Loan and a $1,400,000 outstanding principal amount of the Floating Rate Loan[171]. - The company expects to reduce its debt with proceeds from the sale of 30 properties classified as held for sale as of March 31, 2022[149]. - As of March 31, 2022, the total outstanding floating rate debt amounted to $2,785,158, which includes $1,400,000 from the Floating Rate Loan and $1,385,158 from the Bridge Loan[183]. - The company entered into a loan agreement with a weighted average annual fixed interest rate of 4.417% for the Fixed Rate Loan, maturing in March 2032[152]. - The weighted average annual interest rate payable under the Floating Rate Loan was 3.060% as of March 31, 2022[150]. Interest Rate Exposure - A hypothetical one percentage point change in interest rates would change the fair value of the company's fixed rate debt obligation by approximately $55,883[179]. - The company is vulnerable to increases in interest rate premiums upon renewal or refinancing of its obligations due to market conditions or perceived credit risk[184]. - The interest expense is expected to be affected by changes in the U.S. dollar-based short-term rates, specifically SOFR[183]. - The company has purchased interest rate caps with strike rates of 2.70% for the Bridge Loan and 3.40% for the Floating Rate Loan to hedge against SOFR rate changes[183]. - A one percentage point increase in interest rates would raise the annual interest expense from $87,296 to $115,148, impacting earnings per share from $1.34 to $1.77[184]. Capital Expenditures and Leasing Costs - The total leasing costs and concession commitments for new and renewal leases during the three months ended March 31, 2022 amounted to $4,772, or approximately $0.65 per square foot per year[102][104]. - During the three months ended March 31, 2022, the company capitalized $3,765 in tenant improvements, leasing costs, and development activities, compared to $1,055 in the same period of 2021[167]. - The company has estimated unspent leasing-related obligations of $28,700 as of March 31, 2022[170]. Shareholder Returns - The company declared a quarterly distribution of $0.33 per common share, totaling approximately $21,600, to shareholders of record on April 25, 2022[166].